Analysts Warn Bitcoin Sell-off Could Extend to $38K as Risk Sentiment Weakens
Analysts caution that Bitcoin could fall further toward $38,000 after recent weakness that pushed prices below key support. The piece highlights deteriorating risk sentiment, liquidation of leveraged long positions, and technical indicators signaling increased downside — notably breach of important moving averages and support zones. Market drivers cited include strong US macro data and higher bond yields that favor the dollar and weigh on risky assets, plus rising short interest and options positioning that amplify downside risk. Traders are advised to watch $38K as a potential target and a critical support zone, monitor on‑chain metrics and derivatives (funding rates, open interest, options skew), and manage leverage and stop levels. The analysis frames the move as a technical and sentiment-driven correction with potential for short-term volatility; longer-term holders may view dips as accumulation opportunities if macro conditions stabilize.
Bearish
The article points to technical breakdowns and worsening risk sentiment — classic drivers of further downside. Breaches of key support and moving averages often trigger cascade selling by trend-following funds and liquidations of leveraged long positions, which increases volatility and pushes prices toward the next structural support (here identified near $38K). Macro factors cited — stronger US data and rising bond yields — strengthen the dollar and reduce risk appetite, removing broad tailwinds for crypto. Elevated options skew and rising short interest can both magnify downward moves by incentivizing hedging and short squeezes in the short term that deepen drawdowns. Historically (e.g., Q1 corrections in past years), combinations of technical breakdowns plus adverse macro data accelerated declines before stabilizing when funding rates normalized and on‑chain demand returned. Short-term implication: higher volatility, greater probability of reaching $38K and possible intraday washouts; traders should reduce leverage, tighten stops, or consider short exposure with risk controls. Long-term implication: if macro environment eases and on-chain demand resumes, BTC may find accumulation bids at lower levels, but that recovery depends on macro stabilization and normalization of derivatives metrics.